Top 3 Monopoly stocks in 2022

What if the market 52-week high was around at 62,000? Today it is trading at around 54,000. So almost a 14% drop in the market, but many mid and small-cap stocks have corrected by 30 to 50%. And if you want to purchase any stock, you have plenty of options today.

When you have a lot of options, it often creates confusion in the minds of customers about what should I buy? Should I buy blue chip stocks or should I buy small cap stock which is down by 50 percent, it creates a larger amount of confusion in the minds of customers.

In this article, I'm going to tell you how you can invest your hard-earned money in these turbulent times and how you can identify multi-bagger stock and put your money into that stock so that that money works for you, I want to explain to you three best Monopoly stocks that you can buy and take advantage of this current level. 

So why Monopoly stocks? So what monopoly means there is only a single player in the market and the customers do not have any choice they got to buy from this particular company.

Only it gives a complete competitive advantage for the particular company with high market share high growth, better pricing power go to profitability, you can tell 100 things about to go Monopoly. So I'm going to tell you the three best Monopoly stocks. 

#3. Number

So, number three on my recommendation list is Computer Age Management Services Ltd ($CAMS). This company is all after India's largest registrar and transfer agency approximately 70% of the transaction for any mutual fund is been handled by CAMS. You take any big AMC like, ICICI, HDFC, or SBI. TATA, BIRLA, DSP, KOTAK every body's business transactions have been handled by CAMS.

So it's one of the largest and this company works on a revenue model fee-based revenue model. So overall, whatever the transaction, they do assets under management or they take a percentage of it. So it is a very, very high good revenue model followed by CAMS. 

They have a huge geographical presence they have 2 processing centers and services centers across the states, all the 25 states when the IPO got released from CAMS, IPO was priced around it 1400 It got listed around 1400, and from 1400, it went up to 4000 and today it is trading around 2200 almost a 40% drop from the highest level.

So, I would say that it is about 52 week low. So, if you look at it CAMS as a business model, they are presented to mutual fund the business and today mutual fund the business is one of highly progressing business CFD is not a given range and people are earning a good amount of money they are doing a good amount of saving.

What they will do with our money, they have to come into mutual funds, they have to put their money into the stock market. So the SIP book was around 6%. Today the SIP book is around 12,000 Crore when FIA is withdrawing the money crazy then why did the market is actually not getting fall and are crashed to the extent of what they are retrieving?

Because in the end retail investors are actually participating in the market and mutual fund the business is highly progressing when the mutual fund the business is progressing. They are the one the one who are doing all the transactions 70% of transactions happening through CAMS alone.

So the quality of the company is good. There is no doubt it is good. If we look at the financials in 2020 164 crore is the sale and in 2021 189 crores and in 2022 Today it is 230 crores that is a positive trajectory definitely there will be a positive trajectory because mutual fund year is growing so, as CAMS business when the sales are increasing.

Of course, the profits also will increase by 40 crores in 2020, 53 crores 2021, 68 crores in 2022 Absolutely. I would say it is a positive good quality positive financials. If we look at the valuations stock PE 38 times a very reasonable I won't say it is an expensive ROC is 67% and the ROE is 54% and it is Amazing and debt to equity almost in debt free company free Cash Flow after 924 crores.

Which is also good. My favorite category of analysis is FIA and DIA. FII holds approximately 30% DII holds 15% or so 45 percent from institutions. Definitely, it's good. So, the quality is good, valuations are okay fair valuations, and positive financials. 

#2. Number

My second pick is IRCTC there can be 3000 or 3500 stocks is actively getting traded in the market, but the Darling the investor darling stock is IRCTC undoubtedly. This company is having a 100% Monopoly. If you want to book online ticketing in railways, if you wanted to have any meal in railways, if you want to purchase a water bottle 100% control to buy IRCTC.

The stock was trading around 1100 and currently trading around 679 approximately 40% fall from the peak. So 100% Monopoly quality is good. If we look at the financials of this particular stock the profit in 2019 was 84 crores and in 2020 was 135 crores and it was flat because from 135 to 194, again it is coming back to 209. 

But why it was flat of course, we all know that the lockdown at a particular time that is more than one year. The operations that were were very very flat and now the relaxation after the relaxation of COVID is dropping. Now, the activity is picking up the travel is picking up so it is back to good times now. 

So as sales, the sales are also 500 to 556 then its light slump on 339 and now it is coming back to pre-pandemic types are 540. So I would say financial is flat. quality is excellent, I would say because of 100% monopoly. financials are flat let's go into valuations. Before I explained the valuation.

I wanted to say the two biggest disadvantages when you purchase IRCTC stock Yes, there are two biggest disadvantages. The number one is it is a PSU company. So government at any point in time might change their decisions, if they are changing their vision, it might have a negative impact on profitability. 

That is the worrying saying the government intervention, one single decision can change for example, suddenly in 2020, September, they mentioned that, okay, that 50% pledge after convenience fee should be given to the government. So something like that at some decisions, if they implemented, it might have an impact.

So it's we can't say no to that particular position. So, that is a slight tested disadvantage when you invest with the PSU stocks as such, number two is falling FIA and DIA participation. FIA and DIA are the institution make much money in the stock market and they participation are decreasing, this is the second biggest worry I have about IRCTC but the other parameters are just fine. 

The PE is 100 reasonable ROA of 12 percentage valuations are fair, definitely. But these are the two things you need to keep it in your mind when you invest with the IRCTC.

#1. Number

So, the number one pick for Monopoly stock, which is Indian Energy Exchange Ltd ($IEX). The stock was trading around 295 and currently trading at 197 again a 30% drop from the original level and this company has a 95 percent of monopoly and 95 percentage of the transaction happening through the Indian energy exchange. 

So which is which is definitely a good this company is having an amazing sophisticated infrastructure, let it be the IP infrastructure are the artificial intelligence state of the art. This what happens with the Indian energy exchange is that suppose if someone is placing an order.

let's say I wanted to buy 50 units, and someone is selling 50 units means those two orders needs to be matched the order matching needs to be matching that company needs to have that kind of an algorithm that this company has exactly good IT infrastructure that is the reason that 95 percent of the trade happening on this exchange. 

And that means that a majority of the buyers, majority of the sellers, they trusted this exchange and they actually transacted with this exchange so that makes this company as a 95%Monopoly. Quality wise it is excellent. If we look into the financials in 2020 their sales are 69 crores, in 2021 their sales are 95 crores and in 2022 their sales are 112 crores. 

complete projected profits of 47 crores in 2020, 64 crores in 2021and 81 crores in 2022. I would definitely say it is outstanding. The financials are outstanding and valuations stock PE at 58 times which is reasonable almost a year 64% 64 is outstanding ROE is 50% outstanding debt to equity almost debt free company.

And it has got a cash-free cash flow of 2200 which is also good the five-year cash flow and my own personal pick is that the FIA and DIA participation 27 plus another 20% Almost 47% of the holdings are from FIA and DIA. This an amazing company.

Disclaimer

If you want to purchase these three companies. Number one, please do your own research. Number two, consult your financial consultant because when you purchase a stock it should be compatible with your investment requirement, your return expectation your horizon your risk appetite has to be met. If you don't know all this stuff, please take help from an expert for at least one purchase.